Rural Housing Blog

National Rural Housing Coalition member organization, Self-Help Housing Corporation of Hawaii (SHHCH) hosted a ground breaking ceremony on June 21, 2017 in Waianae. Twelve families are set to begin construction on their new homes, and once the Pokai Bay Project is completed, there will be 70 Mutual Self-Help built homes in the community.

SHHCH is a nonprofit organization that provides technical assistance to low-income families in Hawaii that enables the families to build their own homes through the team self-help housing method. Over the past 52 years, SHHCH has helped families develop 656 homes in Hawaii with the U.S. Department of Agriculture’s (USDA) Mutual Self-Help Housing program.

With the Mutual Self-Help Housing program, teams of 6 to 12 families are paired together to help build each other’s homes. With SHHCH, each family contributes 16 hours of labor each weekend over the course of a year to complete construction. No family moves in until all of the homes for the group are completed. SHHCH works with the families to secure the necessary financing from the government, including the Section 502 Direct Home Loan program, other nonprofit organizations, and private lenders. The families earn “sweat equity” by working to build their own homes the, thereby reducing purchase and construction costs.

Mutual Self-Help Housing is an innovative and essential program for low-income families across America. Because the families are able to earn sweat equity, families earning under 80 percent of the area median (AMI) income are able to become homeowners. In fact, in the Waianae community, 58 of the 70 self-help homes will be specified for families earning 80 percent of the AMI and 12 homes will be for families earning 50 percent of the AMI. The median price for a previously-owned home on Oahu is $745,000. Comparatively, these self-help families will purchase their homes in fee-simple for $295,000.

SHHCH purchased the land that the 70 homes will sit on in 2013 for $6.2 million, including $3.1 million from the Hawaii Housing Finance Development Corporation. In addition, the Rural Community Assistance Corporation contributed $3.2 million and the Housing Assistance Council contributed $2.5 million.

Greystone Affordable Development, an affordable housing development company and a member of the National Rural Housing Coalition (NRHC), and Winterwood, Inc., a property management company, recently celebrated the reopening of 18 newly-renovated affordable housing communities in Kentucky. All of the properties were financed through the U.S. Department of Agriculture (USDA) Rural Development Section 515 program and ranged from 12 to 60 units per property.

In total, 563 units located in 14 counties were included in the recapitalization and rehabilitation project, which was completed in just 12 months. Greystone worked with Winterwood, USDA’s Rural Housing Service (both the Washington, D.C. and Kentucky State Offices), the Kentucky Housing Corporation, and the Community Affordable Housing Equity Corporation to secure the necessary financing, which totaled $65 million. Rural Development’s Multifamily Preservation and Revitalization Program was essential to the project, and contributed to a $22 rent decrease per unit.

Nearly half of the rehabilitated units (253 units) used energy incentives and rebates through the Louisville Gas and Electric Company and the Kentucky Utilities Company, increasing the energy efficiency of these units by 30 percent.

Greystone Affordable Development, an affiliate of Greystone & Co., Inc., is a leader in the development, recapitalization, rehabilitation, and preservation of affordable rural rental housing. Including the recently completed Kentucky project, Greystone has managed the preservation and rehabilitation of over 8,200 rental units and has another 5,800 in various stages of completion.

For more information about the project and the grand opening, please see Greystone’s press release.

Rural Organizations from across the country wrote to Congress, voicing opposition to the Administration’s proposal to eliminate the Under Secretary for Rural Development and funding for rural development programs.

Washington, D.C.—June 12, 2017— Today, nearly 600 organizations sent a letter to Congress opposing the Administration’s proposal to eliminate the Under Secretary for Rural Development at the U.S. Department of Agriculture (USDA). The letter also lamented draconian cuts to rural development programs in the Fiscal Year (FY) 2018 Budget request that would severely impact people from economically distressed rural communities. Signatures came from organizations located all around the country, and included community development organizations; nonprofit housing developers; state and national trade associations; farmer and agriculture cooperatives; affordable housing organizations; city governments; universities; and tribal governments.

“Rural Development has a proven track record of success in providing targeted support in the form of technical assistance grants and direct financial assistance to America’s hardworking rural families,” said Bob Rapoza, executive secretary of the National Rural Housing Coalition. “Even so, rural Americans still face significant challenges to economic prosperity.”

Rural communities have higher poverty rates and higher rates of unemployment when compared to big cities and suburbs. The families living in these areas also face higher incidences of substandard housing and rent overburden. In addition, over 90 percent of the water systems with a violation of the Safe Drinking Water Act are small systems with 3,300 or fewer users.

The FY 2018 Budget request included substantial cuts – or complete eliminations – to almost all of the programs within the Rural Development mission area. Overall in terms of Budget Authority current Rural Development programs is cut buy $867 million or 31 percent. Specifically, the Rural Business programs and the Rural Business and Cooperative Service, as well as Rural Water and Wastewater Loans and Grants are completely eliminated. In addition, virtually every direct loan or grant program under the Rural Housing Service, including the Mutual Self-Help Housing program, the Section 502 Direct loan program, and the Section 515 Multifamily Housing Loan program, are eliminated as well.

The USDA reorganization plan, announced in early May, would eliminate the Under Secretary for Rural Development – the only subcabinet position focused exclusively on assisting low-income rural and farming communities. The proposal claims that this elimination will “elevate” the Rural Development mission area by reporting directly to the USDA Secretary, however the Administration’s FY 2018 Budget request suggests otherwise.

“By eliminating the Under Secretary for Rural Development and eliminating funding for two dozen housing and rural development programs and rescissions for Fiscal Year 2017 as well—the Administration is clearly turning its back on rural families and the communities where they live,” Rapoza said.

“If the Budget request is approved and the reorganization proposal moves forward rural communities will not receive the quality of assistance and resources needed to prosper,” Rapoza said. “This letter sends a message to Members of Congress that if they intend to meet rural communities’ needs, a strong Rural Development mission area is required.”

The letter was circulated by the National Rural Housing Coalition and the National Sustainable Agriculture Coalition. It has been shared with the House and Senate Agriculture Appropriations Committees.

The executive order includes seven sections. Section 1 outlines the importance of having a secure and affordable food, fiber, and forestry supply for the country, and that the promoting rural communities is in the national interest. Section 1 also states that it is in the country’s interest to ensure that regulatory burdens do not hamper food, agricultural production, and job creation in rural communities.

Section 2 calls for the creation of the “Interagency Task Force on Agriculture and Rural Prosperity,” which will be funded and administratively supported by the U.S. Department of Agriculture (USDA), as permitted by law and appropriations. Section 3 details the membership of the task force. The USDA Secretary will serve as the Chair.

Section 4 provides the purpose of functions of the task force. The task force is directed to identify legislative, regulatory, and policy changes to promote rural America. There are 13 general issues that are identified in the executive order. These include advancing the adoption innovative technology for agriculture production and sustainable rural development, expanding educational opportunities in rural areas, empowering state and local agencies to tailor their rural economic development and agriculture programs to meet their region’s need, promote the preservation of family farms and agribusinesses, and improve food safety, among others.

The remaining sections are administrative in nature, with Section 5 directing the USDA Secretary to submit a report to the President within 180 days on the task force’s recommendations on policy or legislative changes. Section 6 revokes the executive order signed by President Obama establishing the White House Rural Council. Section 7 provides that the executive order does not affect the existing authority of any department or agency, current law, or confer any new rights or benefits.

While the task force is directed to identify changes in policy or law that will “promote . . . economic development, . . . infrastructure improvements, . . . and quality of life” and the executive order includes 13 enumerated areas of focus, notably absent is any explicit directive on – or reference to – rural housing and water and wastewater services. There is no mention of housing or homeownership or rental housing, and the only reference to “water” relates to water users’ private property rights.

Additionally, although the executive order states that the task force should “respect the unique circumstances of small businesses that serve rural communities,” the President’s skinny budget for 2018 calls for the elimination of the USDA’s Rural Business-Cooperative Service (RBCS). The RBCS offers programs that support business growth development and job training opportunities for rural Americans by partnering with private sector local lenders and community based organizations to provide much needed capital in rural areas. RCBS also has several cooperative programs to help rural residents develop ways to create new systems to distribute their products and supplies and improve existing systems through education and technical assistance.

Addressing the economic and community development needs of rural America will require a holistic approach. And while the task force is directed to “remove barriers to economic prosperity and quality of life in rural America,” the enumerated policy points focus almost entirely on agricultural production and agribusiness. A “reliable workforce” for those rural businesses must have access to safe, clean, and affordable housing, water systems, and community facilities.

On Tuesday, April 4, the National Rural Housing Coalition (NRHC) released its 2017 Impact Report. The report, which was funded through the generous contribution of Capital One, included the findings from the 2017 Impact Survey as well as the success stories from 23 rural housing organizations.

The purpose of the Impact Report is to inform policy makers and the public of the broad economic and human impact of nonprofit housing organizations – and the programs that they utilize. The survey asked organizations to respond to seven categories, including homeownership activities, rental housing activities, and clean water and sewer activities. In addition, the survey also asked for organizations that provide housing counseling, technical assistance, or are Community Development Financial Institutions, Community Development Corporations or Intermediaries to respond on their activities. The survey analyzed data from 104 organization of their activity in Fiscal Year (FY) 2016.

In FY 2016, the 104 responding nonprofit housing organizations helped low-income families and communities secure $1 billion in financing to build, purchase, preserve, or rehabilitate 6,505 units of affordable housing and improved access to rural water and sewer systems for 138,115 of families. This resulted in the creation of 13,920 jobs, over $816.43 million generated income, and $442.2 million in tax revenue.

Other key findings from the report include:

84 organizations assisted 3,139 families in rural communities with rehabilitating, constructing, or purchasing their homes. Further, there were 24,104 families on the waiting lists of 26 organizations.

59 organizations helped 378 families participating in the U.S. Department of Agriculture (USDA) Mutual Self-Help Housing Program. These families contributed over $6.885 million in sweat equity by assisting each other in the construction of their homes – averaging $18,215 per family.

4 organizations secured over $92 million in financing for 106 water or sewer projects for construction of new systems, repairing or replacing existing systems, consolidating systems, or addressing regulatory compliance issues and provided technical assistance on 97 projects, totaling some $64.35 million.

NRHC presented the findings from the Report at a briefing on the Hill in the Capitol Visitor Center on the evening of April 4. In addition to the findings from the briefing, five organizations presented on case studies that are included in the report. Their presentations are provided below.

Marty Miller, the Executive Director of the Office of Rural and Farmworker Housing in Yakima, WA, presented on the Esperanza Development, which serves the farmworker community Mattawa, WA. This project was funded by USDA Section 514 and 516 farmworker housing programs, as well as over $1 million in additional funding from the Washington State Housing Trust Fund.

Julie Bornstein, the Executive Director of the Coachella Valley Housing Coalition, presented on the Los Jardines community. This community, located in Coachella, CA, is made up of 205 single-family homes constructed through the Mutual Self-Help Housing program. The homeowners worked together in groups of 10 to 12 families for 10 to 12 months for 40 hours per week to build their homes, earning sweat equity equivalent to a down payment in the process.

Karen Speakman, the Deputy Director of NCALL Research, Inc., presented on the Chandler Heights II preservation project, in Seaford, DE. The 24 unit property was constructed in 1992 with a Section 515 Loan. The rental units needed significant overhaul due to water damage, poor drainage, and other issues. Today, in addition to new roofs, siding, and other upgrades, Chandler Heights II has 4 new 1 bedroom units and a handicap accessible playground.

Selvin McGahee, the Executive Director of Florida Non-Profit Housing, Inc., presented on the Casa San Juan Bosco II development. After Hurricane Charley devastated Desoto County, FL, the Catholic Charities and Diocese of Venice reached out to FNPH to address the loss of housing in the area. Using USDA Section 514 and 516 and financing from the Florida Housing Finance Agency, FNPH developed 53 single-family rental homes for farmworkers and their families.

Kathy Tyler, Housing Services Director at Motivation Education & Training, Inc., presented on a single-family housing rehab project. The home was owned by a farmworker family made up of parents and two children. The home had holes in the walls and a dirt floor. Construction was provided by farmworker construction trainees enrolled in the Southwest Texas Junior College and funding from the Department of Labor-National Farmworker Jobs Program, HUD and USDA, as well as other state and local sources.

The lack of adequate water and waste disposal systems is a major infrastructure need of rural America and it is directly link to another pressing infrastructure need – substandard housing.

Most violations of federal drinking water standards are made by small communities with limited resources to dedicate to compliance. Small and rural drinking water systems constitute nearly 85 percent of the 53,000 community water systems in America. The 2013 Environmental Protection Agency (EPA) Drinking Needs Assessment indicated a national need of $64.5 billion for small community water systems.[1] This represents 17.4 percent of total national need. The lack of adequate water and waste water systems has a direct impact on the quality of housing. The American Community Survey found that almost 630,000 occupied households in the country lack complete plumbing facilities – meaning they do not have one of the following: a toilet, tub, shower or running water.

President Trump proposed to triple funding for EPA’s Safe Water and Clean Water State Revolving Funds (SRFs), which would make $6 billion available. However while approximately 96 percent of all health-based violations occur in systems serving a population of less than 10,000, less than a third of the SRF outlays are directed at these same small systems. Thus, this proposal would not meet the needs of America’s small towns.

The National Rural Housing Coalition has recommended that 20 percent of the new proposed level of funding for EPA’s SRFs be transferred to the U.S. Department of Agriculture (USDA) for use in its water and waste disposal loan and grant program and Sections 504 and 533 repair programs. USDA’s Water and Sewer loan and grant financing program is a key component of economic development in rural America. The agency boasts a portfolio of more than 18,000 active water/sewer loans, more than 19 million rural residents served, and a delinquency rate of just 0.18 percent. USDA is better equipped to address rural community facilities needs than state SRFs.

With the USDA Section 504 Loan and Grant program and the Section 533 Housing Preservation Grant program, rural communities have been able to address substandard housing needs that stem from a lack of adequate plumbing. These programs can provide critical assistance to shore up this infrastructure. For example, with an expanded HPG grant of $400,000 and $370,000 in leveraged funds, Self-Help Enterprises in California provided basic health and safety improvements and drill on-site water wells for 23 families in the drought-ravaged San Joaquin Valley.

The bottom line is that the Administration and Congress should take a holistic approach to addressing America’s infrastructure needs, and include funding for housing and water/wastewater systems in any infrastructure package.

This article is the sixth in a blog series of the Campaign for Housing and Community Development Funding that ties housing to infrastructure. To read the other blog posts, please click here.

Use NRHC’s Advocacy Tools to strengthen your advocacy efforts and make your voice heard on Capitol Hill. Learn how to build relationships with your Senators, Representatives, Local Media, and members of your community.

Toolkits

Making the Most of Congress’ Time At Home: In-District Advocacy. Learn how to best engage with your Senators and Representatives while they are at home in your district, whether by inviting them to visit your organization, meeting one-on-one, or partnering with other local organizations to host a Town Hall meeting.

Local and Social Media 101. Learn how to use social media to build and sustain strong relationships with your Senators and Representatives by using local media and social media. This toolkit provides important tips on pitching news stories to your local media, publishing an op-ed, and using social media.

Creating a Social Media Strategy 102. Learn how to create a social media strategy, regardless of your organization’s available resources. This toolkit was made possible through the generous support of Capital One.

Webinars

Local and Social Media Webinar: Guest Speakers include Ayrianne Parks, Sarah Mickelson, and NRHC Member Bailey Richards from the Housing Development Alliance. This webinar was made possible through the generous support of Capital One. Listen to the webinar or download a copy of our PowerPoint presentation.

In an article published in the December 2016 issue ofSmithsonian Magazine, author Dale Maharidge chronicled the struggles that many of America’s working poor, including high poverty rates, housing affordability issues and food-scarcity. While just over 43 million people, or 13.5 percent of the population, live below the poverty line ($11,880) in the United States, over 31 percent – over 101 million – of Americans are considered “low-income,” meaning they make no more than $48,600 for a family of four or $23,760 for a single person. These families’ low-incomes means that affording safe housing is frequently an issue, particularly because of the ever-increasing cost of housing.

A portion of the article is dedicated to America’s farmworkers. Even though these people work long, back-breaking shifts, due in part to the seasonal nature of farming crops, these families often face great difficulty in affording basic necessities – like a safe place to call home and decent food – even while working full-time.

In California’s Central Valley, where Self-Help Enterprises, Inc. works, farms growing 250 different crops produce a fourth of the nation’s food. The article noted that since SHE was founded in 1965, it has helped family participants create over 6,200 homes in the region through the self-help housing program, which allows participants to use “sweat equity” in place of a down payment. By contributing at least 40 hours a week over the roughly one-year construction period, the families complete 65 percent of the labor in their homes with the help of their future neighbors.

On November 30, 2016, Bob Rapoza presented at the Housing Assistance Council 2016 Rural Housing Conference in Washington, D.C.. The National Rural Housing Coalition Plenary session included a discussion on what the results of the 2016 Presidential election mean for rural housing.

Washington, D.C.— On October 4-5, the National Rural Housing Coalition (NRHC) convened leaders from the rural housing community to evaluate and prepare recommendations that will ensure affordable rental housing options remain available to low- and very low-income residents. The purpose of the conference, which was sponsored by PNC Bank, was to gather feedback from the community and confer on data shared by staff from U.S. Department of Agriculture (USDA) Rural Housing programs. Using this information, NRHC will release a detailed paper on the state of affordable rental housing in rural communities.

“While there were notable investments made several decades ago for the production and maintenance of affordable, rural rental housing, that federal commitment has not kept pace with the need in recent years,” said Bob Rapoza, executive secretary of NRHC. “This is significant because USDA’s current preservation efforts do not appear to be enough to sustain its rental housing portfolio, which is essential to providing clean, decent, and affordable housing for low-income residents in Rural America.”

USDA rental housing is frequently the only affordable rental housing available in rural communities. The average income for tenants is $12,729 annually, many (around 44 percent) are elderly or persons with disabilities and 70.9 percent are female headed households. USDA estimates that $5.596 billion in additional funding is needed over the next 20 years to preserve USDA’s rental housing portfolio. Renovation of these developments is particularly important because USDA no longer provides loans for the financing of new rental housing developments in rural America.

Larry Anderson, Vice President of Rural Housing Preservation Associates, and Richard Price, a Partner at NixonPeabody, discuss the current rural rental housing stock with moderator Tom Collishaw, President and CEO of Self-Help Enterprises.

In addition, there is a rising tide of USDA mortgages coming to the end of their terms. When a USDA mortgage ends—whether it is due to prepayment or mortgage maturity—the property loses rental assistance eligibility, which provides a deep subsidy to very low income households. As a result, an increasing number of very low-income households left with few or no alternatives for affordable, decent housing options.

While the need for renovation and refinancing of the USDA multifamily housing portfolio is great, several organizations have taken advantage of opportunities to acquire, improve the quality of and maintain the affordability of these properties. By working with USDA and state housing finance agencies, as well as combining multiple sources of public and private funds, housing advocates like Greystone Affordable Housing Initiatives and the Southwest Minnesota Housing Partnership have succeeded in preserving USDA’s rural rental homes. NRHC will work with USDA and members of Congress to promote these successful preservation strategies and identify obstacles to success to ensure that affordable rental housing in rural communities is preserved.

“Congress and various Administrations have underfunded efforts to preserve the physical and financial condition of USDA’s investment. As a result, none of the properties in USDA’s portfolio have the capital needed to meet long-term operational costs,” said Rapoza. “NRHC will continue to advocate for the funding and policies necessary to meet the affordable housing needs or rural people and families.”

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Rick Goodemann, Executive Director of Minnesota Housing Partnership, a NRHC Member, explains the approach his organization has used to address the need for preserving rental housing in rural communities.

About Section 515 Rural Rental Housing Loans

For over 50 years, Section 515 loans have been used to improve the quality of affordable rental housing for low-income families in rural America. Today, nearly 400,000 rural families live in housing financed with low-cost Section 515 loans.

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This press release was published on PR Newswire on October 6, 2016 and can be found here.

To view the PowerPoint presentation from conference, please click here.